Slow wage growth isn’t surprising

In a new study, the Migration Policy Institute stated that the nation will have a 5 million shortage of job-qualified people with post-secondary educations by the end of the decade. Immigrants’ rising education levels might, wrote MPI, represent a great opportunity for the U.S. economy. Yet, MPI noted, one-quarter of immigrant college graduates in the U.S. — nearly two million people — are either unemployed or work in jobs that require no more than a high school degree.

The logical conclusion to draw from MPI’s research would be to cut migration until the existing foreign-born population reaches full employment. Until then, adding immigrants only makes job competition more challenging for new migrants, American workers, and already present lawful permanent residents.

For years, immigration activists have argued that with alleged labor shortages looming, the appropriate strategy is to import workers immediately. The more prudent approach, however, would be to wait until the predicted shortage becomes reality, and then adopt an as-needed immigration policy. Scare tactics never come to fruition because, among other reasons, there are millions coming out of our high schools and colleges and entering the labor pool.

Truth be told, labor shortages are good news for American workers, and for those recent graduates just beginning their job searches. Shortages translate into an easier path for unemployed people to find jobs, a stronger employment market for people who previously quit the workforce, and a greater incentive for businesses to pay higher wages to attract the employees they need.

Despite the outcry about labor shortages, corporate-promoted and media-endorsed, the facts belie the claim. National wage growth for the last few years has been tepid, about 2.7 percent, and not an indicator that employers have reached the desperate stage. Realized wage gains still aren’t strong enough to offset the losses suffered after the Great Recession.

Returning to the MPI study, if two million postsecondary-educated immigrants are unemployed or underemployed, then the conclusion must be that higher immigration levels would hurt all.

Simply stated, immigration, especially immigration that includes employment authorization, is too high. To keep upward pressure on wages, and to keep labor markets tight, immigration should be reduced.

Joe Guzzardi is a Progressives for Immigration Reform analyst who has written about immigration for more than 30 years. Contact him at jguzzardi@pfirdc.org.